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China, India and Vietnam to lead transport infrastructure growth in 2012

Singapore, 19 December 2011 - Construction IQhas released the Land Transportation Outlook 2012 which focuses on the growth and development of the Tunnel and Bridge construction sectors in Asia.

The report outlines the project pipelines in the Asian road and bridges infrastructure segment, revealing a strong emerging market bias with the largest investments gravitating towards developing economies of China, Vietnam and India.

These countries have the greatest potential for growth in the coming years, attributing to the numerous urbanization and modernization initiatives being pursued by the respective governments.

In the developed markets, there are a number of exceptions in the tunneling and bridge infrastructure sectors. Most notably are the US$9.7 billion Seoul underground road network project in South Korean and the US$11.3 billion Macau-Zhuhai Bridge project in Hong Kong.

A bottleneck for infrastructure investments in these developing economies however is the prevalence of bureaucracy and intervention which can result in overall costs increases and delay project implementation.

One of the most recent examples of government intervention is the Malaysian government's populist and sometimes arbitrary involvement in settling toll fees for highways.

For instance in January 2011, Malaysia's private sector toll road operators were asked to freeze, cut or abolish tariffs by Prime Minister Najib Razak after the country's number two operator MTD Capital proposed a toll freeze on the KL-Karak highway and the East Coast Highway Phase 1 for five years without compensation.

Notwithstanding these challenges, the overall outlook for the region remains positive as stronger bi-lateral relations between regional trade partners continue to drive road and infrastructure investments aimed at connecting far flung regions with the relatively more developed ones.

Positive examples are seen in China, Vietnam and India, as long term projects include the expansion of the Asia Highway network which will eventually connect countries in Southeast Asia with China and a part of key Central Asian economies.

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